Term Paper Liq vs Profi

8/2/2019 Term Paper Liq vs Profi

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2.1 Introduction

All over the world the dimension of Banking has been changing rapidly due to

Deregulation, Technological innovation and Globalization. Banking in Bangladesh has to

keep pace with the global change. Now Banks must compete both as local institution andforeign one.

The declaration of the Government's bold and far-sighted decisions to allow banks in the

private sectors to play its due role in the economy of Bangladesh, have started the process

of creating new and dynamic financial institutions. Dutch-Bangla Bank Ltd. (DBBL) is one

of them.

Dutch-Bangla Bank Ltd is a scheduled commercial bank of Bangladesh. The Bank was

established under the Bank Companies Act 1991 and incorporated as a public limited

company under the Companies Act 1994 in Bangladesh with the primary objective to carry

on all kinds of banking business in Bangladesh. It is one of the fast growing leading online

banks in private sector. This is a descriptive report on Dutch-Bangla Bank Ltd. that

mentions the activities of General Banking and Foreign Exchange.

2.2 About Dutch-Bangla Bank Ltd.

Dutch-Bangla Bank is a second generation commercial private Bank. During the period of

its operation, this bank creates a milestone of success in banking sector. This bank holds an

experienced team of banking professional. They achieve this success because of their

experienced banking professional team, proper management & so on.

Dutch-Bangla Bank Limited is a Bangladesh–Netherlands joint venture scheduled

commercial bank established in Bangladesh with the primary objective to carry on all kinds

of banking business in and outside of Bangladesh.

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With 30% equity holding, the Netherlands Development Finance company (FMO) of the

Netherlands is the international co-sponsor of the Bank. Out of the rest 70%, 60% equity

has been provided by prominent local entrepreneurs and industrialists & the rest 10%

shares is the public issue. During the initial operating year (1996-1997) the bank received

skill augmentation technical assistance from ABN Amro Bank of the Netherlands.

Starting with one Branch in 1996, DBBL has expanded to sixty three (63) branches

including nine Branches outside of the capital. To provide client services all over

Bangladesh it has established a wide correspondent banking relationship with a number of

local banks. To facilitate international trade transactions, it has arranged correspondent

relationship with large number of international banks, which are active across the globe.

In addition to its banking activities, Dutch-Bangla Bank Limited takes part in different

national activities promoting sports, culture, social awareness, etc. Participation in these

activities as sponsors is part of its business development policy.

2.3 Analysis:

Recently I have gotten a charge in Kawran bazaar Branch of Dutch-Bangla Bank Limitedas a Manager. As a manager I have many responsibilities among that one of the major

responsibilities is Liquidity and profitability management. Total amount of money in this

bank is 200 million taka. From this money bank has to security reserve to the BangladeshBank 18 % of the total amount of money in between

CRR (Cash reserve ratio) 5 % and SLR (Statutory reserve ratio) 13 %.

So total Capital 200 (mn)tk

(-) CRR (5%) 10

---------

190 (mn)

(-) SLR (13%) 26---------

164 (mn)(-) Liquidity (8%)13.12

---------

150.88 (mn)tk ---------

---------

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Total money for investment is 150.88 (mn)tk.

There are basically three types of bank account and the rate of interest bank gives to itsaccount holder

Types of bank account The rate of interest

1.Current account 0%

2.Saving account and 6%

3.Fixed deposit account 12%

There are basically three types of loan and the rate of interest is

Three types of loan The rate of interest

1.Long term Loan 14%

2.Mid term Loan 13%

3.Short term Loan 12%

Bank is situated in Kawran Bazar area. Kawran Bazar is the commercial area that’s whymaximum people are businessman and jobholder so that most of the people open currentaccount then saving account then fixed deposit account.

Name of the Bank Current account Saving account Fixed deposit account

Dutch-Bangla Bank Limited 50% 30% 20%

Fig: Percentage of account holder

The figure shows that 50% of the current account, 30 % of the saving account and 20 % of the fixed deposit account .By the current account we can give short term loan by the saving

account we give middle term loans and by the fixed deposit account we give long term

loan. Short-term loans are for less than six month, mid term loans are for six month to lessthan two years and long-term loans are for two year and above

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Dutch-Bangla Bank Limited

Kawran Bazar Branch

Income Statement30 June, of the year ended 2008

Particulars Taka in

million

Taka in

million

Interest Recivable:

Current account (150.88*50%*12%)

Saving account (150.88*30%*13%)

Fixed deposit account (150.88*20%*14%)

Add: Others incomes

Service ChargeRent for Locker

Operating Income

Less: Interest Payable:

Current account (150.88*0%*0%)

Saving account (150.88*30%*6%)

Fixed deposit account (150.88*20%*12%)

Expense:

SalaryUtility bill

Office Rent

DepreciationOther expense

Gross Profit

Less: Tax (45%)

9.053

5.884

4.225

19.162

8.838

2.00

0.00

2.7163.621

3

11.5

.02

.04

30.00

(6.337)

(5.56)

18.103

8.146

Net Profit 9.9566

------------------

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2.4 Next Course of Action:

As a manager I can take different type of step for maximize the profit of these branch

(DBBL Kawran Bazar). First of all give the training all the employees make them skilledand efficient then

I can establish customer service desk in that desk customer come and get solve their

problems.

I have to ensure quick service so that customer never feels irritating.

Product of the bank is service if the service is good then customer will interested todo transaction by this branch of the bank.

When VIP customer come into the bank have to treat as a VIP otherwise he / she

can be disappointed on this branch.

Bank should be well decorated because people are very comfortable with good

environment.

Have to avoid the corporate politics.

I have to find the big party and open an account so that deposit will be increase if

deposit increase I can invest more and gain more profit.

I have to invest in good sector that means return on time.

Have to manage liquidity otherwise can be face in liquidity crisis by the proper

management of liquidity customer never loss their faith.

3.0 Conclusion:

If I can implement all those activities in our branch I do believe that it makes more profit.

4.0 Recommendation:

As a manager I can recommend First of all give the training all the employees make them

skilled and efficient then. I can establish customer service desk in that desk customer come

and get solve their problems. Have to ensure quick service so that customer never feelsirritating. When VIP customer come into the bank have to treat as a VIP otherwise he / she

can be disappointed on this branch. Have to invest in good sector that means return on

time. Have to manage liquidity otherwise can be face in liquidity crisis by the proper management of liquidity customer never loss their faith.

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5.0 Bibliography:

Reference Md Iftekhar Ahmed AVP DBBL Kawran bazaar Branch

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